Speaking the Language of Business
The Amplified Impact Podcast
April 29th, 2023
Today, I’m going to talk about the importance of learning the language of business.
During my recent trip to Antarctica… I couldn’t help but think about language and communication, especially as I traveled to a Spanish-speaking country. This got me thinking about the language of business and how crucial it is to understand it.
The language of business is finance, money, and numbers, and without knowing it, you’ll struggle to play the game of business.
Many people believe they can hire a translator or delegate this aspect of their business, but this can leave them vulnerable to deceit, confusion, and other risks.
So, it’s essential to learn the language of business and become fluent in finance. Whether you’re an entrepreneur, a manager, or an employee, understanding finance and money is critical to success.
TWEETABLE QUOTE:
“Business success relies on finance knowledge. Outsourcing financial tasks can be risky. Understanding financial statements is crucial. Resources available for learning.” – Anthony Vicino
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Episode Transcript:
Anthony Vicino [00:00:00]:
Hey, real quick, guys. You already know I don’t run any ads on this because I want to keep it like a really awesome listening experience for you. But I do have an ask. I’d love it if you could just help me spread the word so we can help more entrepreneurs, creatives and high performers. Just make more money with less stress and more fulfillment. So the best way that you can help me do that is by reading, reviewing, and sharing this podcast. Like, the single thing I ask of you is please just take 10 seconds to drop a review. Seriously, it would mean the world to me.
Anthony Vicino [00:00:27]:
And more importantly, it may just help change some of these lives. So thank you and let’s get to the show. What’s up, all you beautiful people? Welcome back to the podcast. I’m curious how this episode is going to go because I’m going to admit something. It’s been a couple of weeks since I’ve recorded. I just got back from a wicked awesome trip to Antarctica. So during that period of time as I want to do, what I typically do when I go on vacations or go on these trips, is I think I’m going to be able to maintain my routine, my habits, my rituals, and that I’m going to keep working and it’s going to be awesome. What usually happens is I go on these trips and then no work gets done.
Anthony Vicino [00:01:07]:
So I traveled to Antarctica, brought my microphone, brought my camera equipment so that I could record podcast episodes for you guys. But then I got down there and we were just so busy and exhausted every single day from the expeditions that never actually took the time to record. So the lesson there is don’t bite off more than you can chew. When you go on vacation, go on vacation when you’re working, work. I’m still trying to learn this lesson. So this isn’t me telling you what to do. This is me just reminding myself, hey, Anthony, in the future, when you go and you think you’re going to be super productive on these trips, just know you’re not going to be. So here we are.
Anthony Vicino [00:01:42]:
It’s been about two or three weeks since I recorded the last episodes, which shouldn’t really affect you one way or the other because we batch these so far in advance of when they go live. For instance, I’m recording this in the end of February. And so by the time you’ll see this is maybe April or so, so shouldn’t affect you. But all that’s to say is I’m a little bit out of the routine of talking and speaking hopefully coherently. We’ll see if we can actually get through this. But with all that said today, I want to talk about the language of business. Speaking about talking, speaking about language and all that good stuff, communicating. I was thinking about this on the trip quite a lot, actually.
Anthony Vicino [00:02:20]:
Is that the underlying language. Language is an interesting thing. In general. I live in Minnesota, in the United States, and we’re really blessed that we speak English. And that is the lingua franca, which is the common language of the world. So we can travel internationally fairly easily because a lot of people speak English, which is great because I don’t speak any Spanish, I don’t speak a little bit of German, but you put me in a foreign country and I’m really out of my depth. So it’s really fortunate that a lot of the world also speaks English. And I’m thinking about that a lot on the trip because we’re down in to get to Antarctica, we got to fly into Chile.
Anthony Vicino [00:02:58]:
And it’s a very Spanish speaking country, obviously. And I was like, man, I’m really out of my depth here. If these people didn’t speak Spanish and if I didn’t have a friend on the trip who was kind of a translator, this would be a very difficult trip. And that got me thinking about business and how there is a language of business and if you do not speak it, then the world of business is much harder. Much, much harder. And in fact, I would hazard a guess that you can’t really play the game of business unless you can speak that language. Now, I know a lot of people, they try not to speak the language, and they think they can hire this position out. They think they can get a partner who handles this aspect, the language, the translation.
Anthony Vicino [00:03:39]:
But if that’s the case, if that’s what you’re doing, then you’re always at the mercy, the vulnerability of your translator, right? Like that person who’s doing the translating for you. They can lie to you, they can cheat you, they can mislead you, they can be confused. And so it’s important that you can speak the language of business. And so what is that language? That’s the question. Okay, that’s an easy one. It’s finance. It’s money. Like underlying everything that happens inside of a business.
Anthony Vicino [00:04:08]:
We’re trying to get customers, we’re trying to sell them stuff. But at the bottom of it all, it’s numbers, it’s the math, it’s the finance side. And so a lot of people, myself included in my earlier years, and maybe still to a degree, I outsourced a lot of the financial stuff to accountants, to bookkeepers, to finding partners who handled the financial side who could speak the language more fluently than me. And that can get you into a lot of trouble. It can get you really quickly up a creek without a paddle if you’re relying on somebody else to do, again, the translating for you. And you can’t understand the underlying grammar of looking at a PNL, looking at a cash flow statement or a balance sheet. And if you don’t even know what those things are, a PNL cash flow statement and a balance sheet, then you are woefully unprepared to speak the language of business. And so I wanted to share a couple of resources.
Anthony Vicino [00:05:04]:
I think I got five books listed here that I found particularly useful in my own education and learning how to speak the language of finance and money. So that you can look at a PNL, you can look at a balance sheet, you can look at a cash flow statement, you can understand what these three very important documents are, how they speak to each other, and then what the numbers are telling you. Because again, something I’m very fond of saying is that numbers don’t lie, but I can make them say whatever I want. So if you can’t trust me, you can’t trust my numbers. If you can speak the language of business, you can look at those numbers and you can ferret out exactly where I’m lying to you. But if you don’t speak the language and you don’t trust me, then you are going to be completely taken advantage of at some point in your entrepreneurship journey. So the resources, these books that have helped me, the first one is called Financial Intelligence Manager’s Guide to Knowing What the Numbers Really Mean. And this is a great book for not just entrepreneurs and business owners, but even if you’re a manager within a business, if you’re a W two employee and you like that, you don’t necessarily want to go off and start your own business.
Anthony Vicino [00:06:09]:
You like what you do. It’s important that you can still speak to numbers of business because by doing so, you can make yourself more valuable to the business, right? Like the ability, even if you’re like the marketing manager inside of a big Fortune 500 company, the ability to look and understand the numbers will allow you to come to the table with better ideas of how you can increase the profitability or the overall growth of the company. And that can make you just so much more valuable in increase your earning potential over time, or just bring more satisfaction to what you’re doing because you can now see how all the fingers and webs of the company are intertwined. I found this book to be a really great resource for that. It breaks things down very simply in a way that’s for me, who’s not my default state, is not to live in numbers, I don’t think, in numbers. And so I found this book very easy to digest. Very good. Number two is Accounting Made Simple.
Anthony Vicino [00:07:04]:
This is a super small, very quick read. It is not dense at all. It’s the very high level basics of accounting. And I would start here, honestly, just to start to learn some of the vocabulary before you start diving into some of the heavier books that we’ll talk about throughout this. Now, if you’re not a book person, there is a really fantastic YouTube channel. Let me see if I can pull it up here while I’m talking really quickly, because I found this to be one of the best accounting channels out there. I think it’s yeah, it’s called Accounting Stuff. Really good.
Anthony Vicino [00:07:37]:
This guy does a great job of giving you accounting concepts, breaking them down. I would highly recommend watching this. Okay, book number three. This is what every real estate investor needs to know about cash flow. Now, this book is about real estate investing in specific, but the concepts I find apply to business in general. And so this is a fantastic read. So if you’re looking at investing in real estate, definitely pick this up. If you’re maybe not so curious about that, but you are curious about entrepreneurship, business, this is also still a really great book, understanding Cash Flow.
Anthony Vicino [00:08:13]:
Cash flow is the lifeblood of a healthy company. If you don’t have cash flow, or if you don’t understand the way that it’s calculated or all the different levers that you can pull to manipulate cash flow in real time, then you can be vulnerable. And this is a lesson that I learned when we were building escape climbing, because this was a company that there was really long lead times between when we would make orders for, say, hardware in China. We’d place a million dollar order and then it would take six, nine months to get over the sea to be produced and then get on the boat and then come across to make it to us. Right? So really long lead and lag times between when we’d pour out the cash, when we’d actually sell that product, right? So it might be six, nine months before we actually see the product, and then we sell it to a wall builder, and they might be on net 90 terms, so it could be another three months before they actually have to pay their bills. So, all told, we maybe need to put out a million dollars at the beginning of the year, and 910 months later, we might actually be able to sell and have money hitting the balance sheet. And so understanding how you can manipulate different aspects of that equation to increase your cash flow during the midterm is very important because at the end of the day, just because you made the sale and you have revenue showing up on your PNL doesn’t necessarily mean that’s cash in the bank. And if you don’t have cash in the bank to cover the overhead and the expenses, then you’re going to be out of luck.
Anthony Vicino [00:09:48]:
And so this book what Every Real Estate Investor Needs to Know About Cash Flow. Fantastic book. Go pick it up. This next one is not about finance in particular, but finance is like, if you were going to strip away and say, okay, finance is the language of business. Well, what’s the language of finance? That would be numbers and math, right? So you have to have a basic proficiency in just addition, subtraction, multiplication, division, all these things, right, just to be able to get to the point of understanding finance. And so I find this next book is called Math Better Explained is a great primer for just becoming more proficient at the basics of math. It might seem really silly, but it’s important. And what’s really funny is that in high school and college, you spend a lot of time doing algebra, then geometry, trigonometry, calculus, and so on and so forth.
Anthony Vicino [00:10:41]:
And what I find is that in business and just in life in general, things never really progress much beyond algebra. If you can speak algebra, you’re going to get really far in business. And so you don’t need to go master the complexities of higher math. You just need to understand the fundamentals, the basics really well, and get to the point where you can do these things in your head. I actually have a really good ability at this point to ballpark complicated math equations. I don’t need to get the specific answer off the top of my head, but I can get really close to the answer. And when that comes to negotiations, when it comes to eyeballing a project or just getting a sense for where we’re moving as a company, that’s very, very valuable. Just being able to do that in real time as you’re talking to somebody about numbers, rather than having to sit down with a spreadsheet and get really into the weeds with a calculator, I find that to be not just a really cool party trick, but also very valuable in real estate and in business.
Anthony Vicino [00:11:39]:
The last book, this one is very advanced, very complicated, and I don’t recommend it to everybody. But if you’re a nerd and you want to go deeper into the world of finance, then this book could be a really good place to go. It’s more of a textbook, really. It’s called finance in a nutshell. Don’t let that name fool you. It is very, very complicated and hard book to read. I would start with these other resources that I’ve talked about, but once you’ve progressed through that and you’re ready for the master’s level, finance in a Nutshell is a really good book for that. So those are my resources for you guys to help you start speaking the language of business just a little bit more proficiently, and hopefully this serves you on your journey.
Anthony Vicino [00:12:17]:
If not, hey, that’s okay. We’ll try again tomorrow. All right, guys. I appreciate you being here. Hopefully this wasn’t too weird and awkward, getting back on the horse after a couple of weeks off. If it was, let me know. Shoot me a comment, shoot me a DM, shoot me a review, whatever, and just give me some feedback. Let me know.
Anthony Vicino [00:12:32]:
Otherwise, stay frosty. That’s not a thing I say. Stay hyper focused, my friend. I’ll see you guys in the next episode. Bye. Hey, guys. I love, love, love that you’re listening to the podcast. I truly hope it’s bringing you just a ton of value but if you ever wanted to check out the video version of these podcasts then you should head over to YouTube.
Anthony Vicino [00:12:50]:
They’re going to have more effects, more visual stuff like that and that can help the message sometimes just hit little bit different and reinforce the lesson in a better way. So you can check that out. It’s completely free. Go over to YouTube, search for Anthony Vasino, it’ll pop up and if that’s not what you’re into then cool. Just enjoy the show and let’s get to it.
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